Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January, February, and March 2017 are as follows: The selling price per unit is $2,800. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 1,250 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.1.Prepare income statements forHDin January, February, and March2017under (a) variable costing and (b) absorption costing.2.Explain the difference in operating income for January, February, and March under variable costing and absorption costing. Data TableJanuaryFebruaryMarchUnit data:Beginning inventory150150Production1,2501,1751,275Sales1,1001,1751,295Variable costs:Manufacturing cost per unit produced$700 $700 $700Operating (marketing) cost per unit sold$475 $475 $475Fixed costs:Manufacturing costs460,000 $460,000 $460,000Operating (marketing) costs$120,000 $120,000 $120,000PrintDone%24

1(A) Income Statement under Variable Costing: Particulars January ($) February ($) March ($)…

Answered: January February March Unit data:…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Corporation manufactures and sells 50-inch television sets and uses standard costing. Actual data relating to January, February, and March 2017 are as follows:

The selling price per unit is $2,800. The budgeted level of production used to calculate the budgeted fixed manufacturing cost per unit is 1,250 units. There are no price, efficiency, or spending variances. Any production-volume variance is written off to cost of goods sold in the month in which it occurs.

1.	Prepare income statements for HD in January, February, and March 2017 under (a) variable costing and (b) absorption costing.
2.	Explain the difference in operating income for January, February, and March under variable costing and absorption costing.

Data Table
January
February
March
Unit data:
Beginning inventory
150
150
Production
1,250
1,175
1,275
Sales
1,100
1,175
1,295
Variable costs:
Manufacturing cost per unit produced
$
700 $
700 $
700
Operating (marketing) cost per unit sold
$
475 $
475 $
475
Fixed costs:
Manufacturing costs
460,000 $
460,000 $
460,000
Operating (marketing) costs
$
120,000 $
120,000 $
120,000
Print
Done
%24

Definition Definition System of assigning an estimated cost to the product (instead of the actual cost) so that the product cost can be determined well in advance and the pricing of the product can be done on time. Since the actual cost cannot be predicted at the initial stage of the production process, the estimated cost is recorded in the books. Any deviation of the estimated cost of the actual cost is adjusted in the books at the end of the period.

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